14.3.18

U.S. regulators charge Theranos CEO with fraud

U.S. securities regulators on Wednesday
charged the chief executive of the blood-testing company Theranos,
Elizabeth Holmes, and a former president at the onetime soaring Silicon
Valley startup with an “elaborate, years-long fraud.”
Holmes and Theranos have made a deal to settle the case against them,
with the penalty including her surrendering majority voting control of
the company, according to a statement by the US Securities and Exchange
Commission.
Founded in 2003 by Holmes when she was only 19, the company had been
seen as a rising star but came under scrutiny after The Wall Street
Journal published articles questioning the reliability of its
technology.

Theranos, which had touted a new way of testing that uses far less
blood and delivers faster results at much lower cost than traditional
methods in US labs, has been under civil and criminal investigation over
its claims.
The SEC charged Holmes and former Theranos president Ramesh Balwani
with raising more than $700 million by exaggerating or lying about the
business and its technology.
”As a result of Holmes’ alleged fraudulent conduct, she is being
stripped of control of the company she founded, is returning millions of
shares to Theranos, and is barred from serving as an officer or
director of a public company for 10 years,'” SEC enforcement division
co-director Stephanie Avakian said in a statement.